Taxpayers have long been advised to keep tax records for three years after filing, seven years for good measure. That’s because the IRS generally has three years after a return is filed to assess additional taxes. But a recent Tax Court case, Murrin v. Commissioner, has turned that rule of thumb on its head. 

Why Advice is Changing

The IRS itself has long advised taxpayers to keep tax records for three years if the tax return for that year was filed without complications or complexities. A caveat to this is to “keep records indefinitely if you file a fraudulent return.” This stems from Sec. 6501(c) of the Tax Code, which states: “In the case of a false or fraudulent return with the intent to evade tax, the tax may be assessed, or a proceeding in court for collection of such tax may be begun without assessment, at any time.”

In Murrin v. Commissioner, the taxpayer, Stephanie Murrin, hired a preparer who, more than 20 years later, was found to have falsified her tax returns for 1993-1999, causing her to underpay her taxes. By the time the IRS issued its notice, the tax bill was staggering: a tax deficiency of $65,318, $13,064 in accuracy–related penalties, and (the worst part) an estimated $250,000 in accumulated interest. 

The kicker is that no one—not even the IRS—is asserting that Murrin herself knowingly evaded taxes. It’s generally agreed that she was unaware of the fraud that her tax preparer committed on her behalf. Therefore, Murrin’s team asserted that the statute of limitations had expired because no direct taxpayer fraud was involved. Several courts have now disagreed and sided with the IRS assessment, building a new precedent for interpreting Sec. 6501(c) of the Tax Code. 

In short, it may not be safe to assume that the taxpayer themselves must show intent to commit fraud for the return to be questioned, even decades later. If the return is found to be fraudulent and anyone involved with it had fraudulent intent, the IRS can assess at any time. This may include tax preparers, CPAs, bookkeepers, payroll firms, attorneys, and employees. 

It’s Not Just How Long to Keep Tax Records

There are several important lessons here. First, yes, it may be more important than ever to keep tax records indefinitely, especially if others are involved in helping you with your returns. Doing so could help you defend your case more clearly and easily. Another is one we briefly mentioned: the potential cost of filing a return that you aren’t certain is correct. The interest alone in this case, because so much time has passed, is three times more than the original deficiency. 

And then there’s time and resources: The case may now be reviewed by the U.S. Supreme Court, something that we’re certain was not on Murrin’s bingo card when she filed the tax returns so many years ago. There are other past cases that more narrowly protect innocent taxpayers when someone else commits the fraud, so she may still have a fighting chance. 

But what we also want to drive home: Do your research on who you choose to work with, and pay attention to your tax returns as they are filed. 

As MarketWatch’s  Andrew Kesher discusses, Murrin’s shady tax preparer already had a troubled past by the time she and her husband worked with him: “When Duane Howell began preparing the Murrins’ returns in 1993, his accountant’s license had already been suspended after a 1986 conviction in New York federal court for preparing fraudulent tax returns. The Murrins didn’t know about Howell’s history, and they used his services through 1999.”

It is crucial to review your tax preparer’s background (and that of any professional you work with) before entrusting them with your tax returns. And keep in mind that the accuracy of your tax returns is a shared responsibility. A reputable tax professional will insist you review and sign your return before it’s submitted. Take that opportunity to truly review and ask questions if you don’t understand what’s being claimed. 

And then, once you’ve done your due diligence and before you hit the shredder on your past filings, you might want to keep tax records organized and accessible indefinitely. Maintaining thorough documentation can help resolve any issues that may arise years after your original filing. 

For questions, feel free to contact us. Or click here to schedule a complimentary consultation with a CPA.

Shutterstock Photo2465439305 | May 12, 2026